Can Tax Processors Plus Support assist with Schedules L, M-1, and M-2?
Software reference · Written guide Content date 1 min read
Tax Processors Plus Support cannot assist with reconciling the balance sheet on Schedule L in Forms 1065, 1120-S, and 1120. Only the entity's bookkeeper or accountant has the records and information that are needed to accurately complete the balance sheet and if it is out of balance, determine why.
In the partnership, S corporation, and corporation returns in Tax Processors Plus, only a few items flow directly from the return to the balance sheet:
- Current year and accumulated depreciation and amortization from the entries in the depreciation module. (Depreciation entered directly into Form 4562 does not carry to the balance sheet.)
- Beginning and ending inventory included in the cost of goods sold calculation on Form 1125-A.
- Current year gain or loss.
Tax Processors Plus Support also cannot assist with reconciling Schedules M-1 and M-2 with book income, as only the company's bookkeeper or accountant has access to the books.
Schedules L, M-1, and M-2 aren't required for an entity whose total receipts for the tax year and total assets at the end of the tax year are less than $250,000.
Additional Information:
Balance Sheet Warning - Total Assets Do Not Equal Total Liabilities & Equity
Form 1065 - Schedule L - Balance Sheets per Books
Form 1120-S - Schedule L - Balance Sheet per Books
Form 1065 - Schedule M-1 - Reconciliation of Income (Loss) per Books With Income (Loss) per Return
Form 1065 - Schedule M-2 – Analysis of Partners’ Capital Accounts